If you are purchasing a property in the Valencian Community (Alicante, Valencia, and Castellón), it is important to understand the tax benefits available, whether you are buying a new-build or resale property.
1. Taxes When Buying a Property in the Valencian Community
New-Build Property Taxes
When purchasing a new-build property directly from a developer, you will pay:
• VAT (IVA): 10% of the purchase price.
• Stamp Duty (AJD — Actos Jurídicos Documentados): 1.5% (standard rate in Valencia).
Resale Property Taxes
When purchasing a second-hand (resale) property, you will pay:
• Property Transfer Tax (ITP — Impuesto sobre Transmisiones Patrimoniales): 10% of the purchase price (standard rate in the Valencian Community).
However, there are tax reductions available for certain buyers.
2. Tax Reductions and Deductions for Buyers in the Valencian Community
a) Reduced ITP for Specific Buyers (Resale Properties Only)
Instead of paying the full 10% ITP, some buyers may qualify for a reduced rate of 6% if they meet specific conditions:
✅ Young buyers under 35 years old purchasing their primary residence (vivienda habitual).
✅ Large families (familia numerosa) buying a home as their primary residence.
✅ Single-parent families purchasing a home for their primary residence.
✅ People with disabilities (33% or more) acquiring their main home.
To qualify, the property must not exceed €180,000, and the buyer must become a resident of the Valencian Community.
b) Reduced AJD (New-Build Properties Only)
Buyers eligible for tax reductions may also benefit from a reduced AJD rate of 0.1% instead of 1.5% when buying a new-build property.
This applies to:
• Young buyers under 35 years old.
• Large families.
• Single-parent families.
• People with disabilities.
3. Deductions for First-Time Buyers & Mortgage Holders
The Valencian Community offers income tax deductions for certain groups:
• Mortgage deduction: If you bought your first home before 2013 and still pay a mortgage, you may deduct up to 15% of mortgage interest on your regional tax return.
• Energy-efficient home renovations may qualify for deductions of 20%-40% in personal income tax (IRPF).
4. Special Considerations for Non-Residents
Most tax benefits apply only to residents of the Valencian Community. If you are a non-resident buyer, you will generally pay the full ITP (10%) or VAT (10%) without reductions. However, if you plan to become a resident, you may benefit from these deductions in future tax years.
Conclusion
Understanding these tax reductions can help lower the cost of purchasing a property in the Valencian Community. If you qualify, taking advantage of these incentives can lead to significant savings. Consulting a tax advisor can ensure you maximize your benefits and comply with Spanish tax laws.
